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    Wednesday, June 19, 2024

    ‘Lots of stuff’: Self-storage facilities grow in region

    Owner Michael Dunn, with Dunn Associates, walks through rental units at the upcoming Rent-A-Space Route 85 self-storage facility in Waterford on Tuesday, May 21, 2024. (Sarah Gordon/The Day)
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    Construction workers prepare the exterior walls for paint at the upcoming Rent-A-Space Route 85 self-storage facility in Waterford on Tuesday, May 21, 2024. (Sarah Gordon/The Day)
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    Frank Lishing, Rent-A-Space operations manager, and owner Michael Dunn of Dunn Associates, talk at the upcoming Rent-A-Space Route 85 self-storage facility in Waterford on Tuesday, May 21, 2024. (Sarah Gordon/The Day)
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    Owner Michael Dunn, with Dunn Associates, leads a tour at the upcoming Rent-A-Space Route 85 self-storage facility in Waterford on Tuesday, May 21, 2024. (Sarah Gordon/The Day)
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    Construction workers prepare the exterior walls for paint at the upcoming Rent-A-Space Route 85 self-storage facility in Waterford on Tuesday, May 21, 2024. (Sarah Gordon/The Day)
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    Cindy and Barry Weiner’s living space has fluctuated over the years in a cycle of expansion and contraction that required the occasional outsourcing of their storage needs.

    After a brief attempt at downsizing, the New London couple went last Thursday to their unit at Moove In Self Storage on Bank Street to retrieve items including furniture, China dinnerware and a stereo system. Homeowners once again, they no longer need the extra space the unit afforded them when they moved from their old house to an apartment a few years prior.

    Cindy Weiner said they upgraded back to a house when their granddaughter came to live with them.

    “We were in a one-bedroom apartment, and we needed space,” she said.

    Right now, they’re storing the overflow in their new garage while they figure out where everything will go. But she was grateful for the off-site alternative when her family needed it.

    “It was never in question for us,” she said. “We needed it, and we used it.”

    Amid differing viewpoints on the proliferation of self-storage facilities across the country, there seems to be agreement on one foundational truth: People here like material things.

    Moove In Self Storage President John Gilliland this week said market analysis shows 11.1% of households in the United States currently rent a storage unit. That’s up from 7% in 2007, when the National Storage Association commissioned its first demand study under his leadership.

    “Us Americans, we have lots of stuff,” he said.

    April data from the Yardi Matrix real estate analytics company shows there were 50,000 self-storage facilities in the United States. That’s more than the combined total of Subway, Starbucks and McDonalds locations nationwide.

    Gilliland, of Pennsylvania, had entertained youthful dreams of cow farming before his path forked to commercial real estate. He’d been selling properties for about five years when he brokered a deal for a client whose self-storage facility cost $1 million to build. It sold for $2.6 million.

    “So he made $1.6 million on that transaction in 3 or 4 years, and I thought, ‘Holy smokes, that’s something,’” he said.

    The next year, Gilliland built his first such facility. A quarter century later, he has a portfolio of 88 properties in nine states under the spotted cow brand, including two in New London and one under construction on Salem Turnpike in Norwich.

    The Norwich site, near the Walmart entrance with proximity to Interstate 395, will generate the kind of visibility needed to draw business, according to Gilliland. The industry-standard “three-mile market” dictates most self storage customers live in the immediate vicinity.

    Gilliland said people might not think about self-storage until they need it, but drive-by traffic ensures enough people will remember the Moove In sign when the time comes.

    “So they Google ‘cow storage,’” he said. “And of course our website comes up.”

    Gilliland echoed a sentiment expressed often in the real estate community when he said it’s very difficult to develop in Connecticut, where local and state regulations have a tendency to stymie residential and commercial projects.

    “If we decided, ‘Hey, we want to build another facility today in New London, Connecticut,’ it would take us probably a year to a year and half just to get the approvals, then it will take another year to build it,” he said. “Then it takes three or four years to fill it up. It’s a lot of risk.”

    When it comes to the Norwich site, he anticipated investing about $14 million by the time it’s fully operational.

    Data from local tax assessors shows there are currently six self storage facilities in Groton, five in Norwich, three in New London, three in East Lyme, two in Old Lyme and two in Waterford.

    Boxing out business

    Known even in a development-averse state for being unwelcoming, Old Lyme has become the regional epicenter of opposition to self-storage facilities.

    The commission twice rejected a proposal from local businessmen Sal Russo and Christopher Calvanese for a 31,500-square-foot self-storage facility with three buildings. Both rejections are being appealed in the state Superior Court.

    It would be the fourth self-storage facility approved within 0.3 miles on Shore Road, which serves as the town’s gateway to multiple private and public beach areas. Two of the storage facilities are existing and one has not yet been constructed.

    The strip of state road mingles businesses, private homes and cottages.

    Neighbors have decried the effect of more unattractive buildings on the town’s beachfront character. They worry about environmental concerns, light pollution, noise and traffic.

    One resident last year put it this way: “Nothing of that size needs to be across the street from our $650,000 to $1 million homes.”

    Commission members argued self-storage facilities are better suited for the town’s light industrial zone, which is limited to the area of Hatchetts Hill Road near Interstate 95.

    The issue has become contentious enough to yield a six-month moratorium, set to expire in October, so members of the commission can review existing regulations without the threat of new applications looming over them.

    But Zoning Commission alternate member Michael Barnes earlier this year expressed concern about taking away more options from a set of regulations that already makes many types of developments financially unfeasible.

    He said people are putting up storage facilities because that’s where the money is.

    “We’re kind of boxing our commercial people out of business because we’re not offering any good alternatives,” he said.

    ‘Open arms’

    Real estate investor and developer Mike Dunn characterized Waterford as the antithesis of Old Lyme when it comes to development. He said the town welcomed his self-storage business on Route 85 with “open arms.”

    Construction of the 36,000-square-foot facility, comprising 244 units in two buildings, was ongoing this week as crews applied a stucco finish to the front structure. He said brick accents, carefully selected paint colors and landscaping are designed to be appealing to passers-by on the busy road in close proximity to Interstates 95 and 395.

    The two-story buildings are built into the sloping property so they appear shorter from the road than they really are. There are spots for 21 boats and RVs in the back.

    “My guess is that Old Lyme doesn’t like the look of ugly buildings,” he said. “Well, this one’s not ugly.”

    He said his decision to put another self-storage building here ― he owns one with 677 units on Cross Road in town and another with 369 units in East Lyme ― defied the feasibility study that advised him not to do it. The guidance went back to conventional wisdom that says most self-storage business comes from nearby homeowners and apartment dwellers.

    “Well, if you draw a three-mile ring around here, you’ve got no people,” he said of the industrial triangle and its commercial environs. “But it was just a gut decision that there’s enough traffic on Route 85 that everyone’s going to know it’s here. I think it will fill up.”

    Dunn said he bought the property for $225,000 in 2014 before putting about $5 million into the project, including more than $1 million on site work alone. He cited the need for extensive blasting to get rid of the ledge.

    He credited Waterford officials with recognizing that self-storage facilities provide tax revenue without the need for town services that comes with residential construction.

    “People think putting in houses is good for the tax base. It’s not,” he said. “You spend more on the school system than you take in.”

    Waterford First Selectman Rob Brule said self storage is a good use for the site bisected by Eversource power lines.

    “I don’t think we’ll have six miles of storage units, but where you have these lots that are difficult to develop but are off a main road and easy to get to, I think it’s a smart business venture,” he said.

    He pointed to a hot housing market that has priced out many people who want to buy a house for the first time or upgrade their living situation.

    “And now you bring in 5,000 people from Electric Boat needing a job and a place to live and wanting to bring their belongings, well, there’s a need.”

    For Dunn’s operations director, Frank Lishing of Old Lyme, the job was a simple one to jump into when he started more than three decades ago after having worked for eight years in apartment management.

    Dunn and Lishing agreed auctioning off people’s belongings when they don’t pay the rent is the most difficult part of the job. But other than that, there are fewer headaches that come with operating a self-storage facility compared to a residential rental complex.

    “That’s another reason that people like this investment,” Dunn said. “It is easy, really.”

    e.regan@theday.com

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